Planned expansion follows British neobank Revolut reportedly exploring re-entry into Canadian market.
American FinTech company Zolve is reportedly planning to bring its credit services for newcomers to the Canadian market as soon as July of this year, according to TechCrunch.
Zolve offers financial services to people who move abroad and face barriers to access due to limited credit history.
Zolve offers financial services, such as credit cards and chequing accounts, to people who move abroad and face barriers to access due to limited credit history. The FinTech company claims it allows customers to access financial products more quickly by leveraging credit history from their previous countries of residence.
The neobank just closed a $251-million USD ($361-million CAD) Series B round, consisting of $200 million USD in debt and $51 million in equity. The round was led by India-based Creaegis, with support from HSBC, State Bank of India, GMO, DG Daiwa, and Community Investment Management, as well as returning investors Accel, Lightspeed Venture Partners, Sparta Group, and DST Global. The Houston-based company is now valued at around $800 million USD ($1.1 billion CAD), according to Reuters.
Zolve told TechCrunch it aims to bring its services to Canada by July or August of this year. It also plans to launch loans for automobile purchases, followed by personal and education loans.
RELATED: British neobank Revolut reportedly recruiting talent for a return to Canada
Founded in 2021, Zolve primarily served newcomers from India to the United States (US). Its expansion into Canada is part of a planned foray into new markets, including the United Kingdom and Australia. The FinTech company told TechCrunch it has served 750,000 customers and generated $25 million USD in revenue last year.
“Many migrants are well-paid, in professional roles, and have excellent credit histories, but struggle to access basic services,” Zolve CEO Raghu Gangappa told Forbes.
Similarly, in Canada, newcomers who have been in the country for under two years often face challenges accessing financial services such as credit cards and loans, a 2019 Statistics Canada report found. The disparity was largely due to insufficient credit history, rendering these newcomers “credit-invisible.” To solve this problem, Zolve uses credit data from customers’ previous countries to offer financial products.
Zolve is not the only FinTech company interested in the Canadian market. British neobank Revolut is reportedly recruiting talent for a potential return to the country, after retreating in 2021 following a limited launch.
Zolve faces competition from Canadian startups looking to cater to newcomers who are “credit-invisible,” such as Beacon and Karla, as well as bigger players like Borrowell. Kitchener-Waterloo, Ont. based Vambora, which focused on financial inclusion for immigrants, shut down last year.
Feature image courtesy Zolve.
